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Digital Currency Group Launches, Announces Fundraise

Posted by, admin on October 26, 2015

As you may have seen, last week it was announced that my first company, SecondMarket Solutions, was sold to NASDAQ. As that chapter ended, another one has begun. I am excited to announce the formal launch of my next company, Digital Currency Group, and our first round of funding.

Formation

Digital Currency Group was formed earlier this year when two businesses built under the SecondMarket parent company – Genesis Global Trading, the leading bitcoin OTC trading firm, and Grayscale Investments, a digital currency asset management firm that manages the publicly traded Bitcoin Investment Trust (Symbol: GBTC) – were combined with a diversified, broad portfolio of seed investments I made personally in the bitcoin and blockchain space.

As a result of this combination, DCG is now building and supporting the largest early stage investment portfolio in the digital currency and blockchain ecosystem. We’re also starting high-growth businesses of our own and developing a global platform and network to support our group of companies.

A New Business Model

As a holding company that manages multiple wholly-owned subsidiaries and a portfolio of investments, we benefit from our diversified strategy and flexible structure. It is our view that broad exposure with the optionality to concentrate our focus is a winning strategy. More importantly, we get a front row seat to the evolution of these companies, and can identify opportunities to build service businesses to fill important gaps in the existing market infrastructure. Being structured as a company, versus a fund, allows us to evolve with the industry given our permanent capital base and flexible mandate.

Network as a Competitive Strength

We know for a fact that this industry will continue to evolve rapidly. If we had a crystal ball, we would all place our bets and go home. But we don’t have a crystal ball – instead, we have a strong network of entrepreneurs, investors, institutions, governments, and academics – really smart people who are helping shape and guide the vision for this industry and who can help us expand our perspective, challenge our assumptions, and build the innovative products and services that will catalyze the growth of this industry.

Some of the earliest investments I made included BitPay, Circle, Coinbase, itBit, Ripple and Xapo – which at the time were long shots for many investors. Since then, we’ve invested into 57 companies across 18 countries, and continue to grow at a rapid pace. We’re thrilled to be investing alongside some of the most respected venture and corporate investors in the world – and we look forward to working together with them to continue finding and funding the best ideas.

Fundraise

Given the nascent stage of the industry and unpredictable challenges that lie ahead for early stage companies in bitcoin and blockchain-based innovation, I spent a lot of time thinking about who would be the right partners for my new company. I wanted to work with firms who have a long-term perspective, and were willing to explore with us and invest not only money, but real organizational and intellectual capital into building businesses and partnerships that will enable us to unleash value in new, unprecedented ways. We saw an opportunity to help our partners navigate an increasingly complex market with a growing group of stakeholders spanning various geographies, industries, and a diverse set of motivations.

With that in mind, I’m thrilled to announce that we have closed a fundraise with a fantastic group of corporate and venture investors, including Bain Capital Ventures, CIBC, CME Ventures, FirstMark Capital, MasterCard, New York Life, Novel TMT, Oak HC/FT, RRE Ventures, Solon Mack Capital and Transamerica Ventures.

I’m incredibly proud of this group particularly given that, for many of them, DCG is the first investment in the digital currency and blockchain space.

Looking Ahead

The Digital Currency Group team is excited to be embarking on this journey, and we are working hard to create a new model for innovation – one that puts the entrepreneur first, but also embraces the knowledge, capability, and perspective of the institution. Financial markets depend on many players to operate successfully. Infrastructure is complex, expensive, and has to be maintained. Together with our subsidiaries, entrepreneurs, investors, and partners, we have built an experienced and intellectually curious team that is dedicated to building long-term value in a nascent industry. It is our mission to accelerate the development of a better financial system, and we’re excited to be doing it together with a fantastic group of visionaries.